Cuba Business News

China writes a blank check to Cuba with “donations and interest-free loans”

Using language from the Fox news article “agreements that include donations and interest-free loans” sounds like the term “blank check” to me.

Talks between Chinese President Hu Jintao and Cuba’s Raúl Castro ended with the signing of eight accords, including one on a loan to finance improvements to health infrastructure on the Caribbean island.

The loan, the amount of which was not made public, was signed by the general director of the National Bank of Cuba, Juliana Maritza Martínez, and China Development Bank chief Chen Yuan after the meeting the two leaders held in the Great Hall of the People.

In addition, Cuban Vice President Ricardo Cabrisas and Chinese Trade Minister Chen Deming signed two economic and technical cooperation agreements that include donations and interest-free loans, but the amounts covered in these accords were not made public either.

“For us it is a matter of great pride to maintain relations with all the institutions of the People’s Republic of China and with its people,” said Castro, whose Asia tour - which also includes a visit to Vietnam - seeks to garner support for his economic reform process from other communist regimes who began such a process years ago.

Hu said at the beginning of his meeting with Castro that since Raúl formally succeeded ailing older brother Fidel as president in 2008 “the traditional friendship between China and Cuba has developed greatly.”

“We’re certain that this visit will increase cooperation on the highest levels,” said the Chinese president, who recalled that he had visited Cuba on three occasions.

Read that as “China is giving us more money so we are starting to like them more than Chavez”. The fact is that Chavez is incapacitated with cancer at the very least. He may die of cancer soon or he may loose the election in October. So, Raul is looking for a new sugar daddy and, since the US won’t be giving money to Cuba anytime soon, China is the #1 sugar daddy for Cuba.

Castro also said “The relationship has passed the test of time.” which of course means “China has been giving us money for a long time”.

——————————Havana Journal Comments——————————

Why is China giving a blank check to Raul? Nickel. and maybe oil and maybe sugar but Cuba has something like 40% of the nickel reserves in the world.

Why is nickel so important? The Nickel Institute says “Nickel-containing materials play a major role in our everyday lives – food preparation equipment, mobile phones, medical equipment, transport, buildings, power generation – the list is almost endless. They are selected because - compared with other materials - they offer better corrosion resistance, better toughness, better strength at high and low temperatures, and a range of special magnetic and electronic properties.

Most important are alloys of iron, nickel and chromium, of which stainless steels (frequently 8-12% nickel) are the largest volume. Nickel based alloys - like stainless steel but with higher nickel contents - are used for more demanding applications such as gas turbines and some chemical plants.Turbine

In addition, iron and nickel alloys are used in electronics and specialist engineering, while copper-nickel alloys are used for coinage and marine engineering.”

END

Sounds like a metal China will need for a long time.

Raul is selling Cuba and China is buying all it can. Maybe China will not “invest”, in tourism but it will buy all the commodities Cuba can offer.

Even though China is the latest sugar daddy to come along, I don’t think China is there for political reasons unlike the Russians and Chavez. They want Cuban nickel, oil, sugar, maybe pharmaceuticals and cigars too.

This is interesting to watch. The Castros are masters at screwing “investors” even if the investors are “donating” and “loaning” money but the Chinese know this.